Hospitality sector faces £1bn hit as 750k more workers are dragged in to national insurance raid
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PUBS and restaurants will be hit for £1billion as 750,000 more workers are dragged in to the national insurance raid. Industry chiefs say the hike, due on April 6, has already led to a hiring freeze and rise in prices. It comes as ministers propose new workers’ rights measures, adding more unwanted red tape for bosses.
![[Headshot of Rachel Reeves, Chancellor of the Exchequer.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/2025-chancellor-exchequer-rachel-reeves-965213858.jpg?strip=all&w=960)
Shadow Cabinet minister Andrew Griffith said: “Labour will kill off pubs and hospitality venues with the double whammy of their extreme union charter and jobs tax. “Whether the price of your pint goes up or your local shuts down, there’ll only be one man to blame: Keir Starmer.”.
![[Bartender pouring beer into a pint glass.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/pouring-beer-964479997_885279.jpg?strip=all&w=960)
More than 1.2 million hospitality workers are not currently eligible for employer national insurance contributions. But after Chancellor Rachel Reeves lowered the threshold employers start paying NI from £9,100 to £5,000-a-year, they will owe it for 774,000 more workers.
Kate Nicholls, of UK Hospitality, said: “It is already forcing businesses to abandon investment, reduce headcounts and raise prices. It’s completely misguided to be punishing a sector that has such growth potential.”. The workers’ rights plan will crack down on zero hours contracts and offer more entitlement to flexible work and protection from unfair dismissal.
But Next boss Lord Wolfson said: “We offer staff extra hours ahead of Christmas. If it means those hours have to be contractually binding forever, we just won’t be able to do it at all.”. The Treasury said: “More than half of employers will either see a cut or no change in their National Insurance bills.”.
